Muni sweeps: Employment slightly better
We are making some headway on unemployment although some states still have substantial problems. For the larger, original version from Calculated Risk Blog click here.
Muni tax exemption “on the table”
Two weeks ago, about a dozen issuer advocates met with staff members for Democrats and Republicans on the Senate Finance Committee to emphasize the important role tax-exempt bonds play in infrastructure development.
The issuer groups were told by staffers that the tax exemption of muni bonds was on the table as part of discussions on spending cuts, and that the committee may soon schedule hearings on this subject, sources involved with the meeting said.
“State and local [governments] know there is no new money coming from the federal government; it’s concerning if tax-exempt bonds are at risk here,” said David Parkhurst, director and legislative counsel for the National Governors Association who declined to comment directly on discussions with members on Congress about the issue
Your tax free internet purchases are likely to come to an end
AP reports how the online/storefront sales tax arbitrage is about to come to an end. States are looking everywhere to collect more taxes and internet sales are an obvious target. From AP:
Internet retailers are required to collect sales tax only when they sell to customers living in a state where they have a physical presence, such as a store or office. When consumers order from out-of-state retailers, they are required under state law to pay the tax. But it’s difficult to enforce and rarely happens.
That means under the current system the seller is absolved of responsibility, buyers save 3 percent to 9 percent because they rarely volunteer to pay the sales tax, and the state loses revenue…
…In February, the Texas comptroller demanded that Amazon.com pay $269 million in back sales taxes because a subsidiary operated a warehouse near Dallas. Amazon is appealing the order.
California estimates it loses at least $200 million a year in uncollected tax from online sales, $83 million from Amazon.com alone. A bill that has passed the state Legislature would force Seattle-based Amazon and others to collect that tax from California residents.
Alabama Governor to discuss bankruptcy with Jefferson County
Gov. Robert Bentley on Friday said he intends to meet with Jefferson County commissioners and state lawmakers who represent the county to discuss options, including bankruptcy, for dealing with the financial problems of the county sewer system.
The county has a $3.2 billion sewer debt that it cannot repay, and earlier this year lost the use of an occupational tax that generated $66 million a year.
On Friday, county department heads placed 547 employees on administrative leave without pay to cut $12.3 million from the ailing county budget through Sept. 30.
Muniland backgrounder on Chapter 9 municipal bankruptcy.
Bad little schools
California Watch reports:
In recent weeks, the state attorney general’s office and county treasurers have issued warning letters to school officials after seeing an uptick in unauthorized district bond deals that saddle communities with higher debt payments.
Two audits at the Sweetwater Union High School District in Chula Vista, for example, found the district borrowed and repaid $40 million from its construction bond money in the 2009-10 school year and is looking to borrow $58 million for the current school year….
… [State Attorney General Kamala] Harris’ office already had blown the whistle at the Poway Unified School District in March. Poway triggered the attorney general’s interest by entering into an agreement with its bond attorneys to pump up the interest rate on a bond sale in exchange for upfront cash. State law requires the cash to be put into an account to pay investors. Instead, Poway intended to use the money to pay its attorneys, underwriters and advisers.
The attorney general’s office slammed the move, calling it illegal.
Wall Street Journal: Unstable Condition
Investment News: Muni-bond funds show signs of improvement
Bond Buyer: Ex-L.A. Mayor Warns of Insolvency
Rhode Island Government: Open Data Project
New York Times: A Schizophrenic, a Slain Worker, Troubling Questions
Birmingham News: Troopers to take over Jefferson County wrecks starting Saturday